A Guide to Copyright Law for Noncommercial Radio Stations · radio stations, distinguished by their community support, control, and programming. Community broadcasting invigorates

This Guide was commissioned by Native Public Media and the National Federation of Community Broadcasters, who have approved of its publication by Garvey Schubert Barer. The Guide contains information of a general nature that should not be regarded as legal advice on particular situations.

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A Guide to Copyright Law for

Noncommercial Radio Stations

BY: JOHN CRIGLER AND MELODIE VIRTUE

January

2017

A Guide to Copyright Law for Noncommercial Radio Stations January 2017 1

About NFCB As the sole national membership and service organization for community radio, the National Federation of Community

Broadcasters (NFCB) is a national alliance of stations, producers, and others committed to community radio. NFCB

provides advocacy on the national level and empowers community stations on the local level.

The National Federation of Community Broadcasters is a grassroots organization of noncommercial, educational, public

radio stations, distinguished by their community support, control, and programming. Community broadcasting

invigorates local communities and adds local voices to the media environment.

The National Federation of Community Broadcasters carries out its mission and philosophy through a series of programs

aimed at benefiting its members as well as the public broadcasting field itself by representing the members and the field

to national policy and funding organizations, and providing technical assistance to improve the quality of community

radio.

Sally Kane, CEO, NFCB

About NPM Native Public Media (NPM) is a national Native organization dedicated to serving Indian Country in our right to connect

and communicate.

Native Public Media works directly with the 567 American Indian and Alaska Native Villages in assisting with broadcast

licensing and providing media opportunities across all platforms including radio, television and the Internet.

Native Public Media through its national and international policy program advocates for Native American advancements

in communications and telecommunications, funding, tribal consultation, policy fellowships, infrastructure deployment,

and services.

Native Public Media through its station support services provides core services to Native stations including regulatory

compliance intervention, legal services, digital literacy, youth media camps, network training and education, community

engagement, resource development, and capacity building.

An organization by and for Native Americans, Native Public Media since 2004, has grown the Native radio network to 58

stations and includes Native television stations and Native media makers as part of its alliance.

Native Public Media works with local, national and international allies in carrying out its mission to promote engaged,

healthy, and independent Native communities through media access, control, and ownership.

Loris Taylor, President & CEO, NPM


What is copyright? The answer used to be much simpler. Before the advent of digital technologies with their capability of making near‐perfect copies, before streaming and podcasting, before YouTube, Spotify, Vimeo, Pandora, Twitter and iTunes, before SoundExchange … well, you get the idea. Now, the starting point for understanding current copyright law is to realize that it encompasses a multitude of different rights, in different kinds of creative works, in different forms of media. Because these rights are largely created by federal statute, they change, sometimes radically, over time. One of the complexities of copyright law is deciding which Copyright Act applies. Is it the Copyright Act of 1909, which still applies to many historic works, the Copyright Act of 1976, or the 1998 Digital Millennium Copyright Act (“DMCA”)? Unless otherwise indicated, statutory references in this Guide are to the Copyright Act of 1976, 17 U.S.C. § 101, et seq. Copyrights created by statute revolve around

definitions. To understand basic principles of copyright

law, you need to understand the definition of terms

such as “work,” “derivative work,” “sound recording,”

“perform,” “reproduce,” “display” and “fair use.”

These and other terms are explained in the discussion

that follows. Most of these definitions are also

featured in the questions around which this guide is

organized.

Just as there are multiple copyrights in multiple kinds of

works, there are multiple organizations that police

those rights and collect royalties on behalf of the rights

owners. ASCAP, BMI, SESAC and now Global Music

Rights (GMR) (known collectively as the performance

rights organizations or PROs) represent the owners of

musical works. SoundExchange collects royalties for

streaming copyrighted music and distributes the

royalties to owners of sound recordings (usually the

record labels) and featured artists.

Different kinds of copyright are subject to different

licensing schemes. Some licenses are created by the

Copyright Act itself. These are called “statutory” or

“compulsory” licenses because they are granted to

anyone who complies with certain conditions and pays

the relevant royalty fee. Another kind of license is a

“direct” license. This kind of license is negotiated

directly with the copyright owner.

The legal sources of copyright law are Article 1 of the

Constitution, various copyright statutes, regulations

established by the Copyright Office of the Library of

Congress, judicial decisions and decisions of the

Copyright Royalty Board (“CRB”), which establishes

royalty rates for streaming copyrighted music. The

glory and bane of copyright law, however, is that it has

not been prescribed by law so much as driven by

reality. Copyright law may hold the leash, but the law

has been unpredictably jerked and dragged by a large,

rambunctious young dog named Digital.

Before the explosion of digital technologies, copyright

law was an arcane field that could safely be left to

experts. New media have exploded traditional

concepts and littered the law with questions relevant

to anyone involved in those media. Who is the

“author” of a video created by a host of collaborators?

Is a database laboriously compiled by a brilliant

computer geek an “original” work or a collection of

factoids not worthy of being called “creative”? Is a rap

song that samples a few bars of a traditional R & B tune

a new work or an unauthorized “derivative work”?

Where is the line between a private and a public

“performance,” a Spotify song downloaded to party in

your living room and the same song broadcast at 4:00

a.m. when even fewer people may be listening? What’s

the difference between a podcast and a broadcast of

the same work? This Guide will help you answer these

questions.

This Guide is not a treatise on copyright law. It will

introduce you only to portions of copyright law that are

relevant to broadcasting and streaming music to U.S.

listeners. It barely touches on copyright protection for

photographs, art work, literature, architecture,

software and dance, or of the relationship between

U.S. copyright law and the laws of other countries.

Let’s start with some basic concepts and definitions.


What is a Work? Copyright law protects original works of authorship fixed in a tangible medium of expression. Protection

arises automatically from the moment of fixation. No registration or other filing is required. Protected

types of works include the following:

(1) literary works;

(2) musical works, including any accompanying words;

(3) dramatic works, including any accompanying music;

(4) pantomimes and choreographic works;

(5) pictorial, graphic, and sculptural works;

(6) motion pictures and other audiovisual works;

(7) sound recordings; and

(8) architectural works. [Section 102 of the Copyright Act.]

What rights does copyright law confer? The owner of a copyright has the exclusive right to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and

motion pictures and other audiovisual works, to perform the copyrighted work publicly;


(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a

digital audio transmission. Note that some copyrights adhere to all works and some only to particular kinds of works. Also note that not all rights have the same effective date. For example, as discussed later, under federal law the right to perform sound recordings applies only to sound recordings created on or after February 15, 1972. Anyone who violates any of these exclusive rights is an “infringer of copyright,” but an oddity of the Copyright Act is that it does not define an “infringement.” That definition has largely been left to the courts. [Section 106 of the Copyright Act.]

What’s the difference between a musical work and a

sound recording? Music consists of at least two separate copyrighted works. One is the musical composition, known as the musical work. The copyright in the musical work, consisting of the lyrics and the arrangement of musical notes, is usually owned by the composer or songwriter. The copyrights can be shared by the lyricist and band members who arranged the music, but typically those rights are assigned to music publishers. The second type of work is a sound recording, a particular recording of musical work. The copyright in the sound recording is usually held by a record company.

Copyrights in the musical work confer the right to reproduce, distribute, and publicly perform the work. Copyrights in the sound recordings confer the right to reproduce and distribute the work, but the right to publicly perform the work is limited to digital transmissions. Thus, for now, a license fee is required to stream a sound recording, but not to broadcast it. Unless rights are covered by a statutory license, they must be "cleared" – i.e., licenses or permissions to use the music must be obtained – before music can be used on the Internet. As discussed later, podcasts require specific licenses for reproduction and distribution rights.


What’s a “work made for hire”? A work made for hire is a work:

(1) prepared by an employee within the scope of his or her employment; or

(2) specifically ordered or commissioned, which the parties agree, in writing, is a work made for

hire.

Stations that wish to commission and own copyrighted musical works, such as original compositions or

theme music, may do so with those who are not employees, but a written agreement should clearly

indicate that the resulting work will be a work for hire.

What is a public performance? To perform or display a work “publically” means –

(1) to perform or display it at a place open to the public or at a place where a substantial

number of persons outside of a normal circle of a family and its social acquaintances is

gathered; or

(2) to transmit or otherwise communicate a performance or display of the work … to the public,

by means of any device or process, whether the members of the public capable of receiving

the performance or display receive it in the same place or in separate places and at the

same time or at different times.

[Section 101 of the Copyright Act]

Regardless of the number of actual listeners, a broadcast or digital stream will be deemed to be a

“public” performance because it is inherently “capable” of being received by members of the public.

What is a “public performance” of a digital sound

recording? Copyright Office regulations define a public performance of a sound recording as “each instance in

which any portion of a sound recording is publicly performed to a Listener” but excludes:

(1) a sound recording that is not copyrighted (e.g., because of its age, it is in the public domain);

(2) a sound recording for which the licensee has a direct license from the copyright owner; and

(3) an incidental performance that both:

(a) makes no more than incidental use of the music (e.g., “brief musical transitions

in or out of commercials or program segments, brief performances during news,


talk or sports programming, brief background performances during disk jockey

announcements, brief performances during commercials of sixty seconds or less

in duration, or brief performances during sporting or other public events”), and

(b) “other than ambient music that is background at a public event, does not

contain an entire sound recording and does not feature a particular sound

recording of more than thirty seconds” (e.g., theme song).

What is the duration of copyright? The duration of a copyright depends on when the work was created, under which copyright act, and

(sometimes) on when or whether it was published. For a work created on or after January 1, 1978,

copyright in the work exists from its creation for the life of the author plus 70 years after the author’s

death. When the work is “a work for hire,” the copyright exists for a term of 95 years from its

publication or 120 years from its creation, whichever occurs first. Under federal copyright law, any work

created prior to 1923 is in the public domain, but state laws may protect the work for longer if federal

copyright law does not apply.

A useful chart for determining when federal copyright expires can be found at

http://copyright.cornell.edu/resources/publicdomain.cfm .

Determining which works are in the public domain can be a complex task, particularly for works created

before 1978. For example, one state court held that although pre‐1972 sound recordings were not

protected by federal law, they were protected in perpetuity under state law.

Works may be donated to the public domain before the expiration of the copyright or may be licensed

under private licensing schemes. For instance, some works are licensed under Creative Commons

licenses, in which authors select the terms of how their works may be used, such as for noncommercial

use only. See https://creativecommons.org/. Other similar sources for music can be found at

freemusicarchive.org, ccmixter.org, and jamendo.com.

What is fair use? Fair use is a defense to a claim of copyright infringement. It permits reproduction of portions of

copyrighted work, without the copyright owner's consent, for purposes such as criticism, comment,

news reporting, teaching (including multiple copies for classroom use), scholarship, or research.

Four statutory factors guide courts' application of the doctrine. Specifically, courts look to:

(1) the purpose and character of the use, including whether such use is of a commercial nature

or is for nonprofit educational purposes;


(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a

whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

Because fair use is an "equitable rule of reason," courts have discretion to honor a fair use defense

based on the facts of a particular case.

[Section 107 of the Copyright Act.]

The Copyright Office has developed a fair use index of cases that is searchable by court and category of

use at http://www.copyright.gov/fair‐use/fair‐index.html. The cases show how courts apply the four

fair‐use criteria to particular facts.

What licenses does a station need to broadcast musical

works and sound recordings? Public performance licensing of musical works in the U.S. historically has been handled by three major

performing rights organizations (PROs) ‐ ASCAP (American Society of Composers, Authors and

Publishers), BMI (Broadcast Music Incorporated), and SESAC (Society of European Stage Authors and

Composers). As of January 2017, however, a new PRO launched – GMR (Global Music Rights) – which is

trying to extract higher royalties for high profile artists such as Adele, the Beatles, the Eagles, Pharrell

Williams, Katy Perry, Usher and other popular artists. The PROs collect royalties from radio stations,

restaurants, concert venues, and others that publicly perform music and distribute the royalties to the

owners of the musical work, typically the songwriters/composers and the music publishers who manage

rights on their behalf. A broadcast station must buy licenses from these PROs. A license allows the

station to broadcast music within that organization’s repertoire. Go to the specific PRO’s website or

contact the PRO to obtain a list of compositions in its repertoire.

Although commercial stations often negotiate royalty rates directly with the PROs, the rates for NCE

stations are usually set by the Copyright Royalty Board in a ratemaking proceeding every five years. The

rates are then published in the Code of Federal Regulations, 37 C.F.R. Section 381 et seq.

http://www.ecfr.gov/cgi‐bin/text‐

idx?SID=7a6fc9be5a0e2f5a12a01425653fb95d&mc=true&node=pt37.1.381&rgn=div5#se37.1.381_16

CAUTION: Some artists have not signed with or have withdrawn from one of the PROs. Other

organizations are trying to compete with the major PROs by developing their own repertoire. So, be sure

that any music your station airs is licensed by the appropriate PRO.


What licenses does a station need to stream musical

works and sound recordings? To stream music, a station or pure play webcaster needs public performance licenses from ASCAP, BMI,

and SESAC and must be covered by a royalty agreement with SoundExchange or must pay

SoundExchange royalty rates set by the CRB. Royalties for streaming rights to perform sound recordings

are in addition to the royalties owed to perform musical works over the air.

Radio stations have historically been exempt from license fees for broadcasting sound recordings, on the

theory that if radio did not play the songs, no one would buy the records. This exemption does not

apply to digital transmissions, i.e. music streamed on the Internet.

Based on the fact that digital technology allows flawless copying, sound recording copyright owners

secured the right to “perform” sound recording by digital audio transmissions in the Digital Performance

Right in Sound Recordings Act of 1995. The exemption for over‐the‐air performance of sound

recordings was preserved, but was not extended to the simultaneous transmission of sound recordings

via the Internet.

The 1995 Act created new rights for sound recordings, but not a mechanism for collection of royalties. It

was left to the Digital Millennium Copyright Act of 1998 (the “DMCA”) to create a statutory license for

performances of sound recordings over the Internet. Eligibility for the statutory license requires

adherence to a number of programming and technical restrictions, compliance with recordkeeping and

reporting requirements and payment of royalties, all of which are discussed below.

If a station is not eligible for the statutory license, or if it wants to provide an interactive digital music

service, it must obtain direct licenses from copyright owners of the sound recording. Identifying

individual copyright owners can be difficult. Multiple band members may hold interests in a particular

song; some owners may have assigned their rights to third parties; some may have died; and some may

simply be impossible to locate. Regardless of these difficulties, all rights must be cleared to be sure the

use is non‐infringing.

An entity called SoundExchange is charged with collecting sound recording royalties and distributing

them to copyright owners and artists. Now an independent organization, SoundExchange was initially a

creation of the Recording Industry Association of America (“RIAA”), which represents record companies.

SoundExchange handles only royalties for streaming. It does not administer royalties for broadcasting,

podcasting, RSS feeds, or interactive streaming.


What is the sound recording performance complement? The statutory license for sound recordings comes with certain restrictions. One restriction is the “sound

recording performance complement” on each channel streamed. What is that?

During a three hour period one may:

Play no more than three songs from a particular album;

Play no more than two songs consecutively from a particular album;

Play no more than four songs by a particular artist;

Play no more than four songs from a boxed set; and

Play no more than three songs consecutively from a boxed set.

If, in addition to streaming the over‐the‐air broadcast programs, the station wants to stream “side”

channels, those additional channels must also comply with the sound recording performance

complement. The sound recording performance complement also applies to archived and looped

programs, discussed below.

What other restrictions apply to the statutory license for

sound recordings? The statutory license for sound recordings contains limitations on advance notice. Advance program

scheduling or prior announcement of song titles may not be transmitted by text, video or audio,

although it is permissible to announce the name of a song immediately before it is performed or to

announce that a particular artist will be featured at an unspecified future time. One or two artists, or a

particular genre of music, may be identified to illustrate the type of music on a particular channel, but a

prior announcement that a sound recording will be played at a particular time is prohibited because

such an announcement facilitates copying of that recording.

The song, artist and album must be identified. During the performance of a sound recording, one must

identify, in textual data, the sound recording, the album and the featured artist, if receivers are capable

of displaying the information.

Transmission of copyright management information is required. If technically feasible, digital

transmissions must be accompanied by information encoded in the sound recording that identifies the

title of the song, the featured artist and any other related information.

A sound recording may not be performed in a way that falsely suggests a connection between the

copyright owner or recording artist and a particular product or service.


One must disable copying by a transmission recipient if the technology used can be disabled, and may

not induce or encourage copying by transmission recipients.

One must accommodate technical protection measures widely‐used by sound recording copyright

owners to identify or protect copyrighted works if those measures do not impose substantial burdens on

the transmitting entity.

The transmitting entity must cooperate with copyright owners to prevent recipients from automatically

scanning transmissions in order to select particular recordings, if such cooperation will not entail

substantial costs or burdens.

The statutory license is limited to transmissions of lawful sound recordings. Transmissions of bootlegs

or unauthorized, pre‐released recordings are not covered by the statutory license.

The transmitting entity cannot allow automatic switching of channels. Digital transmissions may not

automatically and intentionally cause a device receiving the transmission to switch from one program

channel to another.

The statutory license does not cover interactive services which allow the consumer to select the songs.

Are waivers of the DMCA restrictions possible? Yes. It is possible to obtain a waiver of the conditions to the statutory license, such as the sound

recording performance complement. Some stations have been successful in getting record companies

to waive some of the DMCA programming restrictions.

The National Association of Broadcasters (NAB) negotiated partial waivers from Sony Music

Entertainment (“Sony”) and Warner Music, Inc. (“Warner”). The Sony waiver, which expires December

31, 2020, requires that broadcasters opt‐in to the agreement. It applies to both commercial and non‐

commercial broadcasters. Stations wishing to opt‐in to the Sony waiver can do so at <http://www.mmsend61.com/link.cfm?r=a3By1qsTMCpNTLER3iAmGg~~&pe=‐

oklTg871FUxg_iQD9rlQSfMBq1eaKWApSAyHVYUtTjzgnzFrjUIIAdJaUZ5wJj8U7NR5VuCAv9sBGwYiO014Q~~>.

The Warner agreement, which expires September 30, 2019, does not require that a broadcaster opt‐in,

but applies only to commercial stations.

Each Waiver is slightly different, but, here are key provisions:

Despite the restrictions in the “sound recording performance complement,” the Waiver Agreements allow broadcasters to transmit consecutively up to one‐half of an entire album of sound recordings and permit the transmission of certain classical musical works in their entirety, regardless of duration.


The Waivers allow prior aural announcements, but not prior publication of a written or visual advance program schedule that identifies the particular artists or sound recordings that will be featured at specified future times. Classical music broadcasters, however, can publish a schedule of classical music programming in accordance with their standards and practices as of September 30, 1998.

The Sony waiver allows broadcasters to announce in written or visual form, that a program featuring a particular artist or artists will be aired at a specified future time if (a) the station airs a recurring program that features the music of that artist(s) and the program was on the air as of August 1, 2016, or (b) the station airs a tribute or documentary for special occasions, such as the death of an artist or to honor a commemorative milestone in music history or career of an artist.

To the extent that music‐intensive stations use third‐party programming over which the broadcaster does not have the right or ability to control music selection, or programming not performed using a digital music file system, the Waivers waive the requirement that textual data must identify the artist, song title, and album while the song is streamed.

Sony requires that stations which opt‐in to its Waiver Agreement and that have more than 80,000 music ATH per month provide a “buy now” link to purchase a download of a sound recording through a Sony‐authorized store, such as iTunes or Amazon.

The Waivers lift the 6‐month limitation on retaining ephemeral copies of recordings (such as songs from a CD copied onto a station’s hard drive music system).

Although the Waivers do not apply to all webcasters or to all the major labels, some webcasters have

obtained waivers directly from labels. Contact the labels directly to ask for those waivers in writing.

What are archived and looped programs? An archived program is one posted on a website for listeners to hear repeatedly, on demand, in the

same order. It may not be less than five hours in duration. Such archived programs may reside on the

website for no more than a total of two weeks and must otherwise meet the terms of the statutory

license described above. Merely changing one or two songs does not make the program a different

program, nor can programs be taken off for a short period of time and then made available again.

The limitations on archived programs do not apply to recorded events or broadcast transmissions that

make no more than an incidental use of sound recordings, so long as the transmissions do not contain

an entire sound recording or feature performances of a particular sound recording.


Looped or continuous programs are those that are performed continuously so that the program

automatically starts over when it is finished. They may not be less than three hours in duration. Again,

merely changing one or two songs does not create a new program.

The ability to repeat other programs is also limited. Programs that are retransmitted at publicly‐

announced times in advance can be repeated only if:

The repeats of a program are limited to three times in a two‐week period for programs under

one hour in duration.

The repeats are limited to four times in a two‐week period for programs over one hour.

What are the royalty rates for streaming? CRB Rates. Under rates adopted by the Copyright Royalty Board (“CRB”) for 2015‐2020, music

streamers (“Statutory Licensees”) must pay a minimum annual fee of $500 per channel. The CRB

statutory license rates effective through 2020 are:

$0.0017 per performance for nonsubscription services

$0.0022 per performance for subscription services

Royalty rates are recouped from that minimum annual fee for commercial webcasters. Noncommercial

webcasters’ payment of a minimum annual fee of $500 per channel, however, covers up to 159,140

Aggregate Tuning Hours (“ATH”) (defined below) per channel, per month. That averages out to 218

online listeners per hour each month. Performances over that ATH threshold must be paid at the

commercial “per performance” rates listed above.

The rates are adjusted each year based on changes in the cost of living determined by the Consumer

Price Index.

Noncommercial Educational Stations Covered by CPB Agreement. CPB and SoundExchange reached an

agreement whereby CPB pays a lump sum to cover specified noncommercial stations and other non‐

profit entities (“Covered Entities”) that distribute noncommercial programs. The current agreement

covers the period 2016‐2020. To be covered, a non‐profit entity must be a noncommercial terrestrial

radio station that receives funding from the CPB; an affiliate of NPR, American Public Media, Public

Radio International or Public Radio Exchange; or a member of the National Federation of Community

Broadcasters.

Eligible public stations must elect to participate by registering through CPB's website at

http://www.cpb.org/stations/musicrights/ . Registered stations do not have to pay a minimum annual

fee to SoundExchange, but do need to provide data regarding performances of music (i.e., song title,

featured artist, album title, marketing label, play frequency, and start time and duration for transmitted

sound recordings) so that CPB can provide system‐wide reports of use to SoundExchange. If a station is


not a Covered Entity, it must abide by the CRB rates and terms applicable to noncommercial webcasters

or elect an alternative deal for which it is eligible.

Accredited Educational Institutions. Noncommercial radio stations that are not CPB‐funded but that

are operated by accredited educational institutions and staffed by enrolled students may elect to

participate in the College Broadcasters deal. A $500 minimum annual fee covers 159,140 ATH per

month and is paid to SoundExchange directly. If that monthly ATH is exceeded in a given month, the

additional performances are paid on a per performance basis at the commercial webcaster rates listed

above. If the educational institution is unable to calculate actual total performances however, it can

calculate royalties using ATH figures and assume that 12 songs per hours are played if it is not subject to

full census reporting described in the Recordkeeping Section below.

PRO Streaming Fees. In addition to paying royalties to stream sound recordings, webcasters must obtain

non‐interactive Internet licenses from ASCAP (http://www.ascap.com/weblicense/ ‐ minimum annual

fee was $288), BMI (http://www.bmi.com/licensing/webcaster/ ‐ minimum annual fee in 2015 was

$351), and SESAC (http://www.sesac.com/Licensing/internet.aspx ‐ minimum fee is $301 per six months

per web page in 2016). These fees cover the on‐line performance of musical works in the PRO

repertories. Information about licensing from GMR is available at http://globalmusicrights.com/.

What is an “Aggregate Tuning Hour”? “Aggregate Tuning Hours” (“ATH”) are the total hours of programming the Statutory Licensee transmits

to all “Listeners.” A “Listener” is defined as a player, receiving device or other point capable of receiving

the digital sound recording. A Listener is thus a device, not a person. For example, if the station

streamed for one hour to 10 simultaneous Listeners, the ATH would be 10. A Statutory Licensee may

deduct from the ATH the time during which it transmitted a song for which it obtains a direct license

from the copyright owner.

What information must a station report? Under the CRB rules, for each sound recording streamed, the following records must be kept and sent

periodically to SoundExchange:

(1) Name of Service (e.g., XYZ Broadcasting, Inc.).

(2) Transmission Category (e.g., “Eligible nonsubscription transmission of broadcast simulcast programming not reasonably classified as news, talk, sports or business programming” defined in the rule as category code “B”).

(3) Featured Artist (the full name of the individual or band).


(4) Sound Recording Title (the song title).

(5) Sound Recording Identification – either:

(a) Album Title and Marketing Label (if a particular sound recording has been released for promotional purposes before the album title is available, the information must be kept only if it is available before or at the time of the performance, but must be supplied if it is available for subsequent performances), or

(b) International Standard Recording Code (ISRC) (imbedded in promotional and commercially released sound recordings which can be read by software).

(6) Actual Total Performances (the number of times a sound recording is “performed” – i.e., each time a sound recording is accessed by a computing device represents a separate performance of the sound recording).

If a webcaster qualifies as a minimum fee webcaster (defined below), instead of reporting based on

actual total performances, it may, instead, report Aggregate Tuning Hours, Channel (for broadcasters,

call sign or FCC facility ID number) or Program Name, and Play Frequency (the total times a sound

recording is “played” during the reporting period – i.e., offered or transmitted by the service, regardless

of the number of listeners).

A “minimum fee webcaster” is a webcaster that does not owe streaming royalties in excess of the

minimum annual fee for the statutory license and that is (1) owned and operated by an AM or FM

station licensed by the FCC or (2) operated by an educational institution primarily staffed by students.

For noncommercial webcasters, the $500 minimum annual fee covers 159,140 ATH (approximately 218

listeners per hour).

Stations covered by the CPB royalty agreement must supply the data listed below to NPR Digital

Services, which submits aggregated music usage information to SoundExchange on behalf of all Covered

Entities:

For each song played on each stream, stations covered by the CPB license provide the following data:

(1) Song title. (2) Featured artist/group/orchestra. (3) Album title.

(4) Marketing label.

(5) Start date and time of song play.

(6) End date and time of play or duration of song.


What is a track? SoundExchange considers each track, on a CD for instance, to be one song. For example, each track or

movement on a classical album must be reported separately.

Who is a featured artist? The featured artist is the performing artist, such as the band, an individual, or orchestra, as

distinguished from the songwriter or composer. For example, it would not be appropriate to identify

Mozart, the composer, as the featured artist.

How often do webcasters need to submit Reports of Use

to SoundExchange? Webcasters must submit to SoundExchange Reports of Use that identify the featured artist, the song

title, album title, marketing label, and number of performances (i.e., number of listeners per song, for

minimum fee webcasters the ATH, or for Covered Entities under the CPB deal the start and end times

and server logs). Reports of Use must be submitted to SoundExchange each month within 45 days after

the end of the reporting month. Webcasters must file monthly Reports of Use on a full “census” basis –

i.e., every song streamed. Minimum fee webcasters, however, and Covered Entities under the CPB

Agreement, can file quarterly based on a two‐week survey per quarter. The two weeks can be

consecutive or two separate 7‐day periods within the quarter. The 7‐day consecutive period may start

on any day of the week.

The precise file format for most reports other than for Covered Entities under the CPB deal is set forth in

Copyright Rule 370.4 found at http://www.loc.gov/crb/laws/title37/. SoundExchange also posts an

Excel spreadsheet, at http://soundexchange.com/service‐provider/reporting‐requirements/, that

statutory licensees can complete and convert to a properly formatted file.

Under the College Broadcasters Agreement, a noncommercial educational webcaster that did not

exceed 159,140 ATH per channel for more than a month in the prior year must prepare Reports of Use

that cover two 7‐day periods per quarter, filed annually by January 31 each year. If the noncommercial

educational webcaster is unable to calculate actual total performances or ATH, it may report channel

and play frequency. If it exceeded 159,140 ATH for more than a month in the prior year, the

noncommercial educational webcaster must file full census Reports of Use each quarter. During the

first, year the channel reports on a full census basis, it will have a 1 year grace period to include ATH or

total performances in its Report of Use.


The College Broadcasters deal provides an exemption from preparing Reports of Use if the webcaster

qualifies for the exemption and pays an additional $100 annual fee (called a “Proxy Fee”). Remember

that this deal applies only to an educational institution that operates a streaming service staffed

primarily by students. Under this deal, a noncommercial educational webcaster can pay the $100 Proxy

Fee and avoid filing Reports of Use if it has no more than 80,000 ATH per channel per month. The ATH

limit represents an average of 109 listeners per hour.

The election to be exempt from reporting must be made each year by January 31. With the election, a

small noncommercial educational webcaster must provide SoundExchange with ATH numbers, music

genre, and other information SoundExchange needs for creating a proxy for distributing royalties.

If an exempt webcaster unexpectedly exceeds the ATH limit in a year, it may still qualify if it takes steps

reasonably calculated to ensure that it will not exceed the applicable ATH limit during the following

year.

Are sound recordings created prior to February 1972

covered by the streaming license administered by

SoundExchange? No. The public performance right in digital sound recordings and the related statutory license are based

on federal copyright law, which does not cover sound recordings made prior to February 15, 1972.

Court decisions have split on the issue of whether such sound recordings are protected under state

common law. A recent decision by a federal appellate court illustrates how tricky copyright distinctions

can be. The appellate court reversed a lower court which had protected pre‐1972 analog recordings

under New York State law. The higher court concluded that digital remastering of old analog recordings

created after the 1976 Copyright Act went into effect created new “derivative” works that were subject

to the federal Copyright Act that preempted state law. The owners of the pre‐1972 copyrights lost the

infringement claim they initially won. Others have been more successful. A class action suit brought

against Sirius XM by The Turtles and other artists resulted in a settlement agreement that could pay the

claimants up to $100 million, depending on the outcome of other lawsuits brought under state law.

Recording Live Music The Copyright Act requires that performers consent to the recording of their live performances and to

the distribution or transmission of that recording. Stations that record live in‐studio performance must

get consents or releases from all performers involved in the performance.

[Section 1101 of the Copyright Act]


What does a station need to do to stream sound

recordings? In addition to complying with the restrictions built into the statutory license and paying royalties, a

webcaster must file a Notice of Use with the Copyright Office in Washington, DC. The form is available

at http://www.copyright.gov/forms/form112‐114nou.pdf . The filing fee is $40 at the time of this

writing. For current fee schedule, go to http://www.copyright.gov/licensing/fees.html .

Alternatively, if a station is eligible, it must register with CPB so that it can be included in the list of

Covered Entities CPB provides to SoundExchange.

Stations that qualify under the deal negotiated by College Broadcasters, Inc., must be noncommercial

educational webcasters (“NEW”) owned by educational institutions and run by students. Such

webcasters must elect the NEW license by January 31st each calendar year.

Does the statutory music license cover operas and

musicals? No. The statutory license covers only non‐dramatic musical works. It does not cover public

performances of dramatico‐musical works, such as an opera or musical. These performance rights are

sometimes referred to as "grand rights." Musical works written to tell a story fall into this category.

Licenses with the PROs and statutory license with SoundExchange cover a single song from an opera or

musical, but not the performance of the entire opera or musical.

To perform an entire opera or musical, either over‐the‐air or on the Internet, a station must obtain a

direct license for the "dramatic" performance rights. Although an opera as a musical work may be in the

public domain, the sound recording of the work may not be. A station must obtain a direct license to

use sound recordings of the work if the sound recording is played in sequence in its entirety.

What licenses does a station need to use music in a

podcast? There are no blanket or statutory licenses for use of music in a podcast. As a result, each copyright in each piece of music must be directly licensed from the owner of the copyright or licensed indirectly through an agreement with organizations such as Creative Commons. The download of a podcast does not require a public performance right, but does require a mechanical license to reproduce and distribute the musical work and a master use license to reproduce and distribute the sound recording.


Podcasts may contain audio, video, images, text, PDF, or other types of files. Although there is much debate about podcast copyright issues, one should assume that a podcast is a reproduction and distribution of a copyrighted work. Before posting a broadcast program for podcast, have permission to use all copyrighted materials included in the program. A podcast program that uses copyrighted material such as songs and video will need one or more licenses in order to reproduce and distribute the work. Program hosts and celebrity guests may also have “publicity” rights (discussed below) that need to be secured.

What’s the difference between a reproduction right and

performance right? When a song is included in a podcast, that song is “reproduced” when the podcast is made available for download. Reproduction rights in the musical work and the sound recording must be individually secured for the podcast.

For the right to reproduce a musical work, a podcaster must secure a mechanical license. The

mechanical license is compulsory. That is, the copyright owner must grant the license based upon rates

set by the Copyright Royalty Board. As prescribed by regulation (37 C.F.R. § 385.3), the maximum

statutory rate for a mechanical license is 9.1 cents per musical work or 1.75 cents per minute of playing

time or fraction thereof, whichever is greater, although it may be possible to negotiate a lower rate

directly from the copyright owner. The podcaster can obtain a mechanical license through the Harry Fox

Agency (HFA). See http://www.harryfox.com/.

Public broadcasting entities can reproduce and distribute musical works at the rates published in 37 C.F.R. Section 381.7, although licenses at lower rates can be separately negotiated. The information required to be included in cue sheets which must be filed with the Copyright Royalty Board are set forth specifically in that rule. For the rule and rates, go to: https://www.gpo.gov/fdsys/pkg/CFR‐2013‐title37‐vol1/pdf/CFR‐2013‐title37‐vol1‐sec381‐7.pdf.

For the right to reproduce the sound recording, a podcaster must secure a master use license directly from the record company. The liner notes for commercially‐released CDs usually list the name of the relevant record company. The record label can charge what it wants and is not required to grant a license.

How are video rights different from audio rights? To reproduce an audiovisual work, a podcaster must obtain a digital transmission license. To perform an audiovisual work, a podcaster must obtain an exhibition license. Typically, the owner of the motion


picture copyright can license both rights together. The owner of the copyright in the audiovisual work can charge what it wants and is not required to grant a license.

The right to reproduce a musical work contained in a motion picture requires a synchronization license. A podcaster will need to determine whether the synchronization right obtained by the producer of the video authorizes the digital transmission of the work. If not, the podcaster must also obtain a videogram reproduction license directly from the music publisher or its licensed agent, such as the Harry Fox Agency. This license is not compulsory but is based on voluntary negotiations between the parties.

Because the integration of sound and image make movies and other audiovisual works unified works, the producer of a video must obtain a master use license from the record company to reproduce the sound recording as part of the video. A podcaster must determine if the master use agreement the video producer obtained covers the digital transmission of the recording. Otherwise, the podcaster will need a separate license from the sound recording copyright owner.

What’s a display right? Any podcast containing artwork, film, a slide, a TV image, a still picture or photograph will need an electronic print reproduction license. If a website contains a "thumbnail" photograph of a record album cover, artwork, a movie poster, or a print from an audiovisual work, display rights need to be cleared.

What’s a right of publicity? Rights of publicity are not federal copyright interests, although they are often closely entwined with those interests. Most states grant individuals (and sometimes their estates) the right to control the commercial use of their name, image, likeness, or some other identifying aspect of identity, generally known as the right of publicity or personality. The scope and duration of the rights vary considerably from state to state. As a result, a program host or other talent, whose voice or likeness are on the podcast, may have the right to license his or her voice or image on a podcast.

The best course of action for the broadcast station is to have a written agreement which specifies that an on‐air program is a "work made for hire." The contract can provide the station the right to use the program in perpetuity in all media. Without a written contract, it may be difficult to clear materials that include the voice or likeness of former employees. In the case of archived materials, the station may need to obtain the permission of the former program host before including the material in a podcast.

Note, too, that additional fees may need to be paid to members of trade unions, such as SAG‐AFTRA (http://www.sagaftra.org/), for use of on‐air materials that are re‐purposed for on‐line transmissions such as podcasts.


Is a station allowed to make copies of its CDs or vinyl

albums to put on its hard drive so DJs can program the

station from a computer? Converting a music library from CDs or vinyl to a computer music vault involves reproduction of both the

sound recording and the music composition. There are no rulings on the question whether such an

unlicensed reproduction violates copyright law.

The Copyright Act allows noncommercial broadcasters to make copies of musical compositions and

sound recordings in limited situations. Section 114(a) of the Copyright Act provides an exemption for a

sound recording included in educational radio programs distributed by NCE stations. This exemption

gives public broadcasters the right to make copies of programs that incorporate sound recordings,

provided that copies of the programs are not commercially distributed to the public. Note, however,

that this right applies to programs, not individual works or sound recordings.

Other exceptions for reproduction of a musical work are narrower in scope. If the public performance of

a musical work is licensed pursuant to the statutory license or a direct license, Section 118(c)(2) of the

Copyright Act allows public broadcasting entities to reproduce and distribute programs containing

licensed works solely for the purpose of allowing other NCE broadcast stations to broadcast the

programs. Copies of those programs must then be destroyed within 7 days. This provision also applies

to the copying and distribution of programs. Thus, it does not explicitly cover copying individual works

on vinyl or CDs to a musical vault.

Section 112(a)(1) of the Copyright Act allows a broadcaster that has a license to perform copyrighted

musical works to make one copy of programs that include a copyrighted work, provided that the copy is

used only for the broadcaster’s own purposes within its service area and that it is destroyed within 6

months of the date of first transmission unless it is preserved solely for archival purposes. Other

elements to consider:

To be licensed to publicly perform means the station has its ASCAP, BMI and SESAC licenses in

place for the musical works.

A “transmission program” is “a body of material that, as an aggregate, has been produced for

the sole purpose of transmission to the public in sequence and as a unit.” Thus, the copying

needs to be in the context of a program, not a copy of an individual album or CD.

The limit is one copy of the transmission program, which must be destroyed after 6 months.

Although no time limit applies if the program is kept for archival purposes, that program could

not be transmitted again after the 6 months expired. The 6 months runs from the date of first

transmission of the program.


The copy made pursuant to this section could not be used by affiliates. The exemption applies

only to the original transmitting organization.

The Sony and Warner waivers lift the 6 month limit on the use of a server copy during the term

that the Waiver Agreements are in effect.

Conversion of a music library to a music vault for convenience of programming a radio station is not one

of the fair use purposes cited in Section 107 of the Copyright Act (listed above), although an argument

can be made that such conversion would be a fair use if it were undertaken to preserve deteriorating

recordings that would be accessed for future research or comment. The non‐profit nature of a

noncommercial station does not necessarily make all copying noncommercial. Copying in order to avoid

buying commercially available digital substitutes may directly affect the commercial market for the

work.

Can DJs use music from YouTube, Pandora, Spotify or

other digital services? Using YouTube content is no different from copying anything else from the web. The station’s

ASCAP/BMI/SESAC licenses and the statutory license cover over‐the‐air performance of musical works,

but do not cover reproduction of those works or the creation of bootleg or derivative works. A copy of a

sound recording played on someone's YouTube video is a derivative work, and unless whoever uploaded

the YouTube video first obtained a synchronization license to use the music with the video, the

derivative work is unauthorized.

A different question arises when the content is a live performance of an artist at a musical venue. In this

situation, a station is performing a recording of a live performance, possibly transmitted on someone's i‐

Phone. The person shooting the video may own the copyright to the sound recording, but that person

probably did not obtain a mechanical license from the owner of the musical work or receive permission

from all the performers to record the live performance in the first place.

Playing a digital download would be covered by ASCAP/BMI/SESAC if the work was included in their

repertories, but what if a DJ plugs his iPad to the board and broadcasts directly from his online music

services, such as Pandora? Again, ASCAP/BMI/SESAC and statutory licenses cover broadcast and

streaming of non‐dramatic musical works and sound recordings, but the situation is murkier when one

reviews the Terms of Service for Pandora, or other online music services. Those terms of service limit

usage to personal non‐broadcast use. Thus, a DJ using his Pandora subscription to broadcast his

“channel” is probably violating Pandora’s terms of service. In fact, Spotify and Pandora cannot authorize

broadcast use because these services do not have authority to license other businesses to perform

works “publicly.”


Another possible risk of liability is third party interference with contract (i.e., the Terms of Service for

music channels). A station could become liable if it induced a breach of the terms of service for Pandora

or Rdio or whatever the music service happens to be. Copyright owners are third party beneficiaries of

those contracts. Bottom line: don’t actively solicit volunteers or employees to plug in their music service

channels or enable that activity unless they have consent from the service or the terms of service for

those music services permit broadcast use.

Should the station allow a program host to post the show

on his or her own website? No. The station’s licenses from the PROs and the statutory license administered by SoundExchange do

not cover the performance of the program by anyone other than the licensee of the station. Hosts need

to obtain their own licenses to transmit any copyrighted content on any server other than the station’s.

They are not covered by the station’s licenses.

Can a station post any photograph it pulls from the

Internet? No. Anyone posting photographs or re‐tweeting them must have a license from the photographer and

possibly a publicity rights consent from the person photographed. Some professional photographers

have made a cottage industry out of detecting unlicensed copies and suing, or threatening to sue, those

displaying their work. The first step is usually a “cease and desist” letter in which an attorney for the

copyright owner asserts the owner’s rights and demands compensation for infringement. Consult with

an attorney before responding to a photographer’s “cease and desist” letter.

If a photograph is obtained from a Creative Commons site, be sure to follow the terms on which that

photograph was posted. For instance, if attribution is required, do not strip the photographer’s name.

Licenses for stock photos can be obtained from sources such Getty Images or Agence‐France Press.

Can a station read a literary work, such as a children’s

book, on the air? There is a no compulsory license for literary works. A direct license from the owner of the copyright is

required. Quotations or short excerpts from literary works are generally permissible under the fair use

doctrine, but an unlicensed recitation of whole works, even if they are short, runs the risk of


infringement. Unfortunately, there is no clearing house for performance of literary works, as there is for

musical works, so stations must clear rights directly with the copyright owner.

What are the penalties for infringement? Because clearing the rights from various copyrights owners is time‐consuming and not always successful,

it is tempting to use copyrighted material without first securing the necessary permissions. In weighing

the risks of doing so, consider the potential costs of copyright infringement. The copyright owner may

enjoin the use of such materials and, in effect, shut down the use. In addition, it may recover actual

damages, profits made by the infringer, or statutory damages, plus attorney fees and costs. For willful

infringement, statutory damages can run as high as $150,000 per infringement. Where the infringer

proves it had no reason to believe its acts infringed on copyrights, the court has the discretion to reduce

damages to $200 per infringement. For a public broadcasting entity, the court can also reduce damages

if the court finds that the public broadcasting entity had no reason to believe that its acts constituted a

violation. For example, with podcasting, each time a podcast is downloaded may infringe multiple

copyrights – the reproduction rights held by the sound recording and the musical work copyright

owners, respectively, the audiovisual rights held by the motion picture copyright owner and the owner

of the display rights. Likewise, operating without the necessary PRO license could add $200 for each

song from its repertoire times every listener. Even minimal statutory damages of $200 can quickly

mount up.


About the Authors

John Crigler Washington, D.C. [email protected] 202.298.2521

John Crigler represents clients in all aspects of public broadcasting. His clients include public radio and TV stations, program producers, nonprofit internet distribution platforms, webcasters, satcasters, community groups, tribal Nations and trade associations. John provides representation before the Federal Communications Commission, the Copyright Office and Copyright Royalty Board, the Corporation for Public Broadcasting, the National Telecommunications and Information Administration and state and federal courts. He writes and speaks widely on public broadcasting topics and is a frequent panelist at conferences on noncommercial broadcasting and the internet.

Melodie A. Virtue Washington, D.C. [email protected] 202.298.2527

Melodie Virtue represents broadcast and online commercial and noncommercial educational radio and television companies before the Federal Communications Commission in Washington, D.C., as well as other federal agencies. Her experience includes proceedings before the FCC dealing with licensing, spectrum auctions, program content, forfeitures, and administrative hearings as well as drafting comments on proposed rules that impact her clients' businesses.

In addition to serving their regulatory compliance needs, she negotiates and drafts contracts on behalf of electronic media clients on various facets of their business, such as asset sales and stock transfer agreements, tower leases, local marketing agreements, programming agreements, and employment agreements. She also advises clients regarding copyright, music licensing, service marks, online digital streaming and podcasting, terms of use, privacy policies, and web site legalities.

About Garvey Schubert Barer Since 1966, Garvey Schubert Barer has worked with clients in virtually all industry sectors, including

communications and media, hospitality, technology, trade and transportation, healthcare,

maritime/admiralty, real estate, entertainment, and manufacturing. The firm provides cost‐effective,

practical solutions to a broad range of businesses, including publicly and privately held companies,

investment firms, financial institutions, not‐for‐profit organizations and individuals.

More information is available at www.gsblaw.com.

Documents

A Guide to Copyright Law for Noncommercial Radio Stations · radio stations, distinguished by their community support, control, and programming. Community broadcasting invigorates